How industry can move toward a low-carbon future

The industrial sector is a vital source of wealth, prosperity, and social value on a global scale. Industrial companies produce about one-quarter of global GDP and employment, and make products and materials that are integral to our daily lives. Their activities, like those of most businesses, also take a toll on the environment. Roughly 28 percent of global greenhouse-gas (GHG) emissions came from industry in 2014. Unless industry can lower its emissions, the world will struggle to reach the GHG reduction targets of 80 to 95 percent that governments set under the Paris Agreement of 2015. Lowering industrial GHG emissions won’t be easy, but it is possible. A new report from McKinsey, Decarbonization of industrial sectors: The next frontier, finds that ammonia, cement, ethylene, and steel companies can reduce their carbondioxide (CO2 ) emissions to near zero with energyefficiency improvements, the electric production of heat, the use of hydrogen and biomass as feedstock or fuel, and carbon capture. The decarbonization of these sectors will cost between $11 trillion and $21 trillion through 2050 and will require accelerating the build-out of renewable-energy capacity, to provide four to nine times as much clean power as industry would need in the absence of any effort to reduce emissions.

Industry decarbonization in brief-DRAFT